Monday, July 13, 2009

Bacardi boss eyes Cuba embargo developments

Bacardi boss eyes Cuba embargo developments
By Alex Wright

Bacardi International's president and CEO Michael Brennan will be
watching with keen interest to see whether the US lifts its trade
embargo with Cuba.

Mr. Brennan, who took time out from his busy schedule to talk
exclusively to The Royal Gazette at the spirits company's official
presentation of an Investors in People award from Minister of Home
Affairs David Burch at the Bermuda Underwater Exploration Institute
(BUEI) yesterday.

He discussed a range of hot topics from the trade embargo to acquiring
stakes in Patrón and Leblon, and losing out on a deal to Pernod Ricard
SA on the purchase of Vin & Sprit, the maker of Absolut, as well as the
company's recent loan refinancing and its first sale of bonds in euros.

Mr. Brennan said that Bacardi, which was originally founded in Cuba in
1862, would be closely monitoring US-Cuba trade relations to see what
developed and the potential impact it might have on the rum industry.
The embargo was imposed by the US on Cuba in October 1960 and covers all
commercial, economic, and financial transactions.

"It is something where we are watching and monitoring what is done with
great interest," he said.

"The company was originally founded in Cuba, so it has got a keen
interest of what is happening there. But I think it is too early to say
what will happen."

Mr. Brennan, who is also the global treasurer for Bacardi Ltd., a
position he has held since 2006, said Bacardi was very committed to
Bermuda, where the company has been based for more than 40 years, and
developing the staff there.

"Bermuda has been our home for over 40 years and we see no change to
that and we are developing our people here," he said. "We are a
family-owned company and we like to have that philosophy in our offices
across the world with our brands and people."

Bacardi missed out on the takeover of Absolut makers Vin & Sprit, along
with other unsuccessful bidders liquor group Fortune Brands and an
investment group controlled by Sweden's Wallenberg family, after French
spirits company Pernod saw its $8.34 billion bid accepted.

But Mr. Brennan said Bacardi was only willing to bid what it considered
to be the right value to acquire a new company and not pay over the odds.

He said the company was always looking for good quality brands that fit
in well with its portfolio and believed that the investments in
internationally-renowned tequila brand Patrón and Leblon, a luxury
spirit from Brazil, proved to be two cases in point.

Mr. Brennan confirmed that Bacardi had completed its under $2 billion
loan refinancing which was launched last month, following a $3 billion
deal, including a $2 billion loan to refinance debt incurred by its
takeover of Grey Goose Vodka in 2004 and a $1 billion bridge loan to
bond issuance in March, despite tough economic conditions and the global
credit crunch.

He went on to say that the company was on the lookout for new campaigns
to follow up the success of its 'Champions Drink Responsibly' campaign,
which won the Best International Communication Award at the European
Excellence Awards 2008 only four months after its launch across 40
different markets, with seven-time Formula One world champion Michael
Schumacher as the global social responsibility ambassador.

Meanwhile, Mr. Brennan said Bacardi was also searching for opportunities
to help in disaster relief efforts, such as the company's $100,000
donation to the Pan American Development Foundation earmarked for
assistance in Cuba in the wake of the devastation wreaked by Hurricanes
Gustav and Ike where thousands of homes destroyed, crops ruined,
infrastructure damaged and lives disrupted.

Talking about the Investor in People award, Mr. Brennan explained that a
team of staff across Bacardi had been working on the achievement for the
past two years, identifying its strengths and areas it needed to improve
on, culminating in receipt of the accolade in recognition of its efforts
from the International Quality Centre in the UK.

"We have found that we were really strong in investing in our people in
ways such as holding and attending conferences and getting further
education for them and really getting to the next level through this
process," he said.

All of Bacardi's Bermuda personnel, including Bacardi Ltd. president and
CEO Seamus McBride, were in attendance at the formal recognition
ceremony held at BUEI with the presentation made by Mr. Burch and Jocene
Wade, a consultant and local Bermuda representative for Investors in
People. The project team was set up in November 2006, with the help of
external adviser Eric Jenkinson, of Jenkinson Consulting & Associates,
in Ireland, and aimed to achieve recognition of the company's inclusion
and involvement of employees in its development.

The award means that the management of Bacardi Bermuda will be committed
to improving the organisation and actively encouraging the learning and
development of all of its employees.

The assessment report will be carried out by external assessor Sarah
Carnegie, who interviewed 17 employees, confirming that significant
effort focused on improving the habits that support the requirements of
the Investors in People standard.

The Royal Gazette (13 July 2009)
http://www.royalgazette.com/siftology.royalgazette/Article/article.jsp?articleId=7d976b330030010&sectionId=65

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